DOING WELL BY DOING GOOD - Worldwide | Nielsen · millennials are most responsive to sustainability...

1DOING WELL BY DOING GOOD Copyright © 2014 The Nielsen Company

D O I N G W E L L B Y D O I N G G O O DINCREASINGLY, CONSUMERS CARE ABOUT CORPORATE SOCIAL RESPONSIBILITY, BUT DOES CONCERN CONVERT TO CONSUMPTION?JUNE 2014

2 DOING WELL BY DOING GOOD

CONSUMERS SAY THEY CARE, BUT DO THEIR ACTIONS FOLLOW?

prefer to work for socially responsible companies

will pay extra for products and services from companies committed to positive social and environmental impact

made at least one purchase in the past six months from one or more socially responsible companies

check product packaging to ensure sustainable impact

volunteer and/or donate to organizations engaged in social and environmental programs

AROUND THE WORLD

Walk instead of drive. Reuse rather than discard. Buy local rather

than shop two towns over. These are simple but effective ways people

can reduce their carbon footprint and contribute to a greener planet.

Today, it’s widely regarded as everyone’s responsibility to protect

the environment and give back socially. And consumers think that

corporations are no exception.

Corporate social responsibility, also referred to as corporate citizenship

or conscious capitalism, is practiced by companies dedicated to making

a positive social or environmental impact on society. More and more,

consumers expect companies to do one or the other or both. If it’s not

using recycled materials in one’s products, consumers want to hear that

a company is working to increase access to clean water, or working to

eradicate extreme poverty and hunger. Companies have come a long way

since the idea of ‘shared value’ was introduced by Michael E. Porter and

Mark R. Kramer back in 2011.

67%

55%

52%

52%

49%


The findings in this survey are based

on respondents with online access

in 60 countries. While an online

survey methodology allows for

tremendous scale and global reach,

it provides a perspective only on

the habits of existing Internet users,

not total populations. In developing

markets where online penetration

is still growing, audiences may be

younger and more affluent than the

general population of that country. In

addition, survey responses are based

on claimed behavior rather than

actual metered data.

ABOUT THE GLOBAL SURVEY METHODOLOGY

Many companies today are making a conscious effort to put

sustainable practices into action. They are well aware that doing so

not only helps the environment and society, it can also create goodwill

for their reputations and contribute positively to their brands’ health

and performance. Green initiatives can also save money. Reducing

packaging materials, minimizing transportation costs and installing

energy-efficient lighting are just some of the ways environmentally

savvy companies are cutting costs. But the bottom line is not just

about profitability—it is also about a culture change.

Many companies have been involved in socially responsible causes for

years, but the growing consciousness of environmental and societal

issues is driving up the number of people interested in corporate social

responsibility: More than two-thirds (67%) of respondents in Nielsen’s

third annual global online survey on corporate social responsibility say

they prefer to work for a socially responsible company.

But do consumers really care about conscious capitalism when it

comes to buying decisions? Are they willing to pay more for products

and services that come from companies that engage in actions that

further some social good?

Nielsen polled 30,000 consumers in 60 countries via the Internet to

take a pulse on:

• How passionate consumers are about sustainable practices when

it comes to purchase considerations.

• Which consumer segments are most supportive of ecological or

other socially responsible efforts.

• The social issues/causes that are attracting the most concern.

This kind of information is enormously important for companies.

“As companies drive to create greater shared value, linking their

business strategy to societal outcomes, they have to put consumers

at the center and understand their expectations,” said Amy Fenton,

global leader of public development and sustainability, Nielsen. “By

identifying the hierarchy of social and traditional brand drivers and

the white space opportunities available, you can develop clear and

actionable sustainability strategies for your brand that will generate

loyalty and improve performance.”


WILL CONSUMERS CARE WITH THEIR WALLETS?You’d be hard-pressed to find a consumer who said he or she didn’t care

about the environment, or extreme poverty around the world. But does

care convert to action when it comes to buying decisions? Assuming

a positive ratio between a stated willingness to pay and an actual

willingness to open one’s wallet, the survey found that the answer is yes

for a growing number of consumers around the world.


More than half (55%) of global respondents in Nielsen’s survey say they

are willing to pay extra for products and services from companies that

are committed to positive social and environmental impact—an increase

from 50 percent in 2012 and 45 percent in 2011. Regionally, respondents

in Asia-Pacific (64%), Latin America (63%) and Middle East/Africa

(63%) exceed the global average and have increased 9, 13 and 10

percentage points, respectively, since 2011.

While a willingness to pay extra for sustainable products is

comparatively lower in North America (42%) and Europe (40%), both

regions show an increase in purchasing sentiment from 2011, rising 7

and 8 percentage points, respectively.

Similar responses are reported for stated past purchases of sustainable

products. More than half of global respondents (52%) say they have

purchased at least one product or service in the past six months from a

socially responsible company, with respondents in Latin America (65%),

Asia-Pacific (59%) and Middle East/Africa (59%) exceeding the global

average. Four in 10 respondents in North America and Europe say they

have made a sustainable purchase in the past six months.

To determine if these sentiments are supported by actual retail

performance, we reviewed retail sales data for a cross-section of

both consumable and non-consumable categories across 20 brands

in nine countries. These brands included either sustainability claims

on packaging or actively-promoted sustainability actions through

marketing efforts. The results from a March 2014 year-over-year analysis

show an average annual sales increase of 2 percent for products

with sustainability claims on the packaging and a rise of 5 percent

for products that promoted sustainability actions through marketing

programs. A review of 14 other brands without sustainability claims or

marketing shows a sales rise of only 1 percent.

“At the moment of truth—in store, online and elsewhere—consumers

are making a choice and a choice that is heavily influenced by brands

with a social purpose,” said Fenton. “This behavior is on the rise and we

are seeing this manifest into positive impact in our communities as well

as share growth for brands.”


PERCENT WILLING TO PAY EXTRA FOR PRODUCTS AND SERVICES FROM COMPANIES COMMITTED TO POSITIVE SOCIAL AND ENVIORNMENTAL IMPACT

Source: Nielsen Global Survey of Corporate Social Resonsibility, Q1 2014

+10

+9

+13

+10

+7

+8

GLOBAL AVERAGE

ASIA-PACIFIC

LATIN AMERICA

MIDDLE EAST/AFRICA

NORTH AMERICA

EUROPE

2014 PERCENTAGE POINT CHANGE FROM 2011

55%

64%

63%

63%

42%

40%

INCREASINGLY, CONSUMERS CARE AND WILL PAY EXTRA FROM SUSTAINABLE COMPANIES


REACHING THE RIGHT CONSUMERSTo separate the passive eco-friendly consumer from the passionate,

Natural Marketing Institute (NMI), a strategic business collaborator

of Nielsen, conducted a nine-country online study to understand how

global attitudes and behaviors are changing with regard to sustainability

engagement. Consumers were clustered into five segments to quantify

what attracts them to sustainability actions.

The findings reveal that two-thirds of the “sustainable mainstream”

population (a cluster of three of the five segments) will choose products

from sustainable sources over other conventional products. They will

buy as many eco-friendly products as they can. They have personally

changed their behavior to minimize their effect on global warming. And

they will be more likely to buy products repeatedly from a company if

they know the company is mindful of its impact on the environment and

society.

Age matters, too. Among global respondents in Nielsen’s survey who

are responsive to sustainability actions, half are Millennials: they

represent 51 percent of those who will pay extra for sustainable products,

51 percent of those who check the packaging for sustainable labeling

and 49 percent of those who prefer to work for a sustainable company.

The average of these numbers is more than double the three-statement

sentiment average for Generation X (age 35-49) respondents (25%) and

more than quadruple the sentiment average for Baby Boomer (age 50-

64) respondents (12%).

Regionally, age variations are notable. There are wide gaps between

younger and older respondents in the Asia-Pacific and Middle East/

Africa regions. In these largely developing regions, Millennial

respondents in favor of sustainability actions are three times more

agreeable, on average, than Generation X respondents and 12 times

more agreeable, on average, than Baby Boomer respondents. In

North America, Europe and Latin America, however, differences

in sustainability sentiment between Millennial and Generation X

respondents are largely negligible and only about two times greater than

Baby Boomer respondents.


MILLENNIALS ARE MOST RESPONSIVE TO SUSTAINABILITY ACTIONS

AMONG GLOBAL RESPONDENTS RESPONSIVE TO SUSTAINABILITY ACTIONS

MILLENNIALS(21-34)

GENERATION Z(UNDER 20)

BABY BOOMER(50-64)

GENERATION X(35-49)

SILENT GENERATION (65+)

Source: Nielsen Global Survey of Corporate Social Resonsibility, Q1 2014Due to rounding, percentages may not add to 100%

These differences matter to companies that want to do well by doing

good—something that will be necessary in the long term if corporate

social responsibility is itself to be sustainable. “Precision marketing

and knowing your consumers intimately will yield the greatest results,”

said Fenton. “It’s no longer a question if consumers care about social

impact. Consumers do care and show they do through their actions.

The question is ‘how is your brand effectively creating shared value by

marrying the appropriate social cause and consumer segments?’.”

PAY EXTRA FOR SUSTAINABLE PRODUCTS

CHECK THE PACKAGING LABELS TO ENSURE

POSITIVE SOCIAL/ENVIORNMENTAL IMPACT

PREFER TO WORK FOR A SUSTAINABLE COMPANY

9%

10%

9%

51%

51%

49%

25%

25%

26%

12%

12%

13%

3%

2%

3%


MILLENNIALS ARE MOST RESPONSIVE TO SUSTAINABILITY ACTIONS

POSITIVE INFLUENCERS WITH THE POWER TO SWAY DECISIONSOn the retail store shelf, where hundreds (or even thousands) of

products compete for our attention, it’s not always easy to stand

out. Making your social commitment clearly visible in your product

packaging can be the difference between a purchase and a pass for many

consumers.

In fact, for more than half of global respondents (52%) in Nielsen’s

survey, purchase decisions are dependent on the packaging, as these

respondents say they check the labeling first before buying to ensure

the brand is committed to positive social and environmental impact.

Sustainable purchase considerations are most influenced by the

packaging in Asia-Pacific (63%), Latin America (62%) and Middle East/

Africa (62%) and to a lesser extent in Europe (36%) and North America

(32%).

Family and friends also have the power to influence our sustainable

purchase decisions. Globally, 47 percent rely on social circles before

choosing a brand to ensure that it has eco-friendly attributes or that

it contributes to a social good. Respondents in the Middle East/Africa

(62%) and Asia-Pacific (59%) are most influenced by family and friends,

while those in Latin America (45%), North America (29%) and Europe

(28%) are not as reliant on these sources.

“With significant percentages of consumers stating their willingness

to participate in socially responsible actions, an eager and passionate

audience is at the ready, expanding the cause opportunity for brands,”

said Fenton. “But success will depend on the ability to connect

sustainable benefits effectively with consumers’ wants and wallets

through clearly communicated and readily available brand positioning.”



ASIA-PACIFIC EUROPELATIN AMERICA MIDDLE EAST/AFRICA NORTH AMERICA

INFLUENCERS ON THE PATH TO PURCHASE

PERCENTAGE USING THE FOLLOWING SOURCES TO ENSURE A BRAND IS COMMITTED TO POSITIVE SOCIAL AND ENVIRONMENTAL IMPACT

I CHECK THE PRODUCT PACKAGING

I RELY ON FAMILY AND FRIENDS

63%

62% 59%45%

29% 28%

62% 62%

36% 32%


CONNECTING WITH THE CAUSES CONSUMERS CARE ABOUTThe world needs helping hearts and hands to improve the quality of

life—and there are many who give selflessly to altruistic activities.

Half of respondents around the world (49%) say they actively engage

in volunteer work and/or donate monetarily to organizations involved

in social and environmental programs, with participation highest in the

largely developing regions of the Middle East/Africa (59%), Asia-Pacific

(58%) and Latin America (46%). Participation is comparatively lower in

North America (40%) and Europe (33%).

With many viable causes in need of support, caring consumers can

choose from a long list to find the ones they are most passionate about.

The top causes (of the 20 included in the study), for which 50 percent or

more global respondents indicate extreme concern, include: increasing

access to clean water, improving access to sanitation, eradicating

extreme poverty and hunger, combating non-communicable diseases,

ensuring environmental sustainability and reducing child mortality.

While the high general levels of extreme concern for causes among

global respondents are noteworthy, these percentages rise by nearly 10

percentage points, on average, when we connect with those who are

most passionate about social and environmental programs, as indicated

by their willingness to either pay extra for sustainable products or

through their active engagement in volunteer activities.

TOP CAUSES OF EXTREME CONCERN GLOBAL RESPONDENTS

GLOBAL RESPONDENTS WILLING TO PAY EXTRA

GLOBAL RESPONDENTS ACTIVE VOLUNTEERS

INCREASING ACCESS TO CLEAN WATER 59% 67% 66%

IMPROVING ACCESS TO SANITATION 53% 63% 64%

ERADICATING EXTREME POVERTY AND HUNGER 53% 62% 60%

COMBATING NON-COMMUNICABLE DISEASES 51% 58% 57%

ENSURING ENVIRONMENTAL SUSTAINABILITY 50% 63% 61%

REDUCING CHILD MORTALITY 50% 58% 56%


THE CAUSES CONSUMERS CARE ABOUT

AMONG GLOBAL RESPONDENTS WILLING TO PAY EXTRA FOR PRODUCTS FROM COMPANIES COMMITTED TO POSITIVE SOCIAL AND ENVIRONMENTAL IMPACT

PERCENT THAT INDICATE EXTREME CONCERN


INCREASING ACCESS TO CLEAN WATER

67%

63% IMPROVING ACCESS TO SANITATION

63%ENSURING ENVIRONMENTAL SUSTAINABILITY

62%ERADICATING EXTREME POVERTY AND HUNGER

52%PROVIDING GREATER ACCESS TO IMMUNIZATIONS

49%PROMOTING GENDER EQUALITY AND EMPOWERING WOMEN

43%

INCREASING ACCESS TO CULTURAL INSTITUTIONS (SUCH AS THE ARTS, MUSEUMS AND PERFORMANCES)58%

COMBATING NON-COMMUNICABLE DISEASES

58% REDUCING CHILD MORTALITY

56% IMPROVING MATERNAL HEALTH

56%COMBATING HIV/ AIDS, MALARIA AND OTHER DISEASES

51%

IMPROVING ACCESS TO SCIENCE, TECHNOLOGY, ENGINEERING AND MATH TRAINING AND EDUCATION

47%INCREASING ACCESS TO TECHNOLOGY

42%

UNDERTAKING DEVELOPMENT PROJECTS THAT BENEFIT THE COMMUNITIES AROUND THEIR OFFICES OR MANUFACTURING UNITS

56%PROVIDING RELIEF FOLLOWING NATURAL DISASTERS

55%ACHIEVING UNIVERSAL PRIMARY EDUCATION

54% PROTECTING ANIMALS

54%INCREASING THE FOCUS OF SOURCING PRODUCTS WE CONSUME SUSTAINABLY

49%PROMOTING RACIAL, ETHNIC AND CULTURAL INCLUSIVENESS

46%SUPPORT SMALL BUSINESS AND ENTREPRENEURSHIP


WINNING AT SUSTAINABILITY

PRINCIPLES IN ACTION

“Companies that are doing well by doing good place an outward, rather

than inward, focus on their efforts,” said Fenton. “Strategies need to be

built in harmony with consumer expectations and the social drivers that

matter most to them and not solely based on what a company thinks

they should do.”

There are many great examples of sustainable corporate actions having

a real impact on the lives of people around the world. Some companies

are returning as much clean water back into the environment as the

unpurified water they used in their manufacturing production plants,

which is leading to a healthier water supply, and in turn, less disease.

Other companies are finding suitable sustainable ingredient alternatives,

which is helping the problem of deforestation.

A five-part approach is required for succeeding at sustainability through

brand strategies:

1. VISION. Be clear, actionable and global.

2. ENDORSEMENT. Get adoption and action from senior leadership.

3. STRATEGY. Focus on outward messaging and consistent cause

messaging.

4. ACCOUNTABILITY. Use key performance indicators, internally and

externally.

5. MEASUREMENT. Quantify program outcomes and return on

investment consistently across markets.

Opportunities to “go green” or indeed “go social” exist in any category,

but you need to understand your brand’s core equity to determine how

far you can credibly stretch into the space. The best initiatives are those

that appeal to a heterogeneous group of buyers, but a keen focus on

your most passionate (and profitable) consumer segments is also vital.

While many consumers may perceive sustainable products to cost more,

you need to understand your optimal price point and the impact on

volume and profit.

Lastly, most consumers are not willing to make efficacy or taste trade-

offs as they aspire to go green. Standards for the basic cost of entry in a

category cannot be compromised.


Source: Internet World Stats, June 30, 2012

COUNTRIES INCLUDED IN THIS STUDY

ASIA-PACIFICMARKET INTERNET PENETRATION

Australia 89%

China 40%

Hong Kong 75%

India 11%

Indonesia 22%

Japan 80%

Malaysia 61%

New Zealand 88%

Philippines 32%

Singapore 75%

South Korea 83%

Taiwan 75%

Thailand 30%

Vietnam 34%

EUROPEMARKET INTERNET PENETRATION

Austria 80%

Belgium 81%

Bulgaria 51%

Croatia 71%

Czech Republic 73%

Denmark 90%

Estonia 78%

Finland 89%

France 80%

Germany 83%

Greece 53%

Hungary 65%

Ireland 77%

Israel 70%

Italy 58%

Latvia 72%

Lithuania 65%

Netherlands 93%

Norway 97%

Poland 65%

Portugal 55%

Romania 44%

Russia 48%

Serbia 56%

Slovakia 79%

Slovenia 72%

Spain 67%

Sweden 93%

Switzerland 82%

Turkey 46%

United Kingdom 84%

Ukraine 34%

LATIN AMERICAMARKET INTERNET PENETRATION

Argentina 66%

Brazil 46%

Chile 59%

Colombia 60%

Mexico 37%

Peru 37%

Venezuela 41%

MIDDLE EAST / AFRICAMARKET INTERNET PENETRATION

Egypt 36%

Pakistan 15%

Saudi Arabia 49%

South Africa 17%

United Arab Emirates

71%

NORTH AMERICAMARKET INTERNET PENETRATION

Canada 83%

United States 78%


COUNTRIES INCLUDED IN THIS STUDY ABOUT THE NIELSEN GLOBAL SURVEY The Nielsen Global Survey of Corporate Social Responsibility was

conducted between Feb. 17 and March 7, 2014, and polled more than

30,000 consumers in 60 countries throughout Asia-Pacific, Europe,

Latin America, the Middle East, Africa and North America. The sample

has quotas based on age and sex for each country based on its Internet

users, and is weighted to be representative of Internet consumers. It

has a margin of error of ±0.6 percent. This Nielsen survey is based only

on the behavior of respondents with online access. Internet penetration

rates vary by country. Nielsen uses a minimum reporting standard of 60

percent Internet penetration or an online population of 10 million for

survey inclusion. The Nielsen Global Survey, which includes the Global

Consumer Confidence Index, was established in 2005.

NATURAL MARKETING INSTITUTE STUDY The findings from the Natural Marketing Institute (NMI) study included

in this report are based on an online survey conducted June 2013 in nine

countries: Brazil, China, India, Germany, Japan, Russia, U.K., South Africa

and the U.S. Data was collected from approximately 1,000 respondents in

each country, with the exception of India and South Africa, which included

1,500 respondents. The data was weighted to represent the age and gender

of each country.

NIELSEN RETAIL MEASUREMENT ANALYSIS The findings from the retail sales information included in this report are

collected from stores using electronic point-of-sale technology and/or

teams of local field auditors. The data represents a cross-section of both

consumable and non-consumable categories across 34 brands in nine

countries for the year ending March 2014. The nine countries include:

Canada, France, Hungary, Netherlands, Pakistan, Russia, South Africa,

Thailand, and the U.K. Stores within Nielsen’s worldwide retail network

include grocery, drug, convenience and discount retailers, who, through

various cooperation arrangements, share their sales data with Nielsen.

OTHER SOURCES:


ABOUT NIELSEN Nielsen N.V. (NYSE: NLSN) is a global information and measurement

company with leading market positions in marketing and consumer

information, television and other media measurement, online

intelligence and mobile measurement. Nielsen has a presence in

approximately 100 countries, with headquarters in New York, USA and

Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2014 The Nielsen Company. All rights reserved. Nielsen and

the Nielsen logo are trademarks or registered trademarks of CZT/ACN

Trademarks, L.L.C. Other product and service names are trademarks or

registered trademarks of their respective companies. 14/7833

ABOUT NMI Natural Marketing Institute (NMI) is an international strategic

consulting and market research company specializing in health &

wellness, sustainability and healthy aging. As a leading business

consulting and market research firm, NMI assists a range of Fortune 500

and start-up companies across many types of industries. By utilizing a

diverse mix of proprietary methodologies and comprehensive syndicated

data, NMI provides its clients with insightful market analysis and

strategic planning. For more information, visit www.NMIsolutions.com.

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